United States District Court, D. Kansas
BRYAN BAILES, Individually and on Behalf of All Others, Plaintiff,
LINEAGE LOGISTICS, LLC, Defendant.
MEMORANDUM AND ORDER
D. Crabtree United States District Judge
Bryan Bailes brings this lawsuit for himself and putative
class members alleging that defendant Lineage Logistics, LLC
violated the Fair Credit Reporting Act (“FCRA”),
15 U.S.C. §§ 1681-81x (2012). The parties met,
negotiated, and agreed to a compromise. On May 9, 2016, they
asked the court to approve the result of their efforts: a
proposed class settlement. Doc. 24-1. On August 19, 2016, the
court denied their motion and gave the parties time to
renegotiate certain aspects of their proposed compromise.
Doc. 25. The parties again met, negotiated, and agreed to a
new proposed class settlement.
December 15, 2016, the court preliminarily approved this new
proposed settlement agreement (“Proposed
Settlement”) and conditionally certified a settlement
class. Doc. 32. Almost a month later, the court approved the
parties' proposed notice and notice plan. Doc. 35. The
parties filed their Joint Motion for Order for Final Approval
of Class Action Settlement on April 19, 2017, and the same
day plaintiff filed a Motion for Attorney Fees and Costs.
Docs. 38, 39. The court held a fairness hearing on April 25,
2017, and is now ready to rule both motions.
Settlement and Class Notice
the court granted the parties' motion for preliminary
approval, the settlement administrator, Analytics Consulting,
LLC, began sending the court-approved notice to putative
class members. The parties expected the class to consist of
3, 400 members, but the actual number was slightly smaller-3,
356. After the initial mailing, the settlement administrator
ran a skip trace and re-mailed notices to 694 class members.
The administrator then ran a second skip trace, and re-mailed
notices to 29 class members. All told, the parties could not
locate 425 of the 3, 356 putative class members. So, all that
left 2, 931 members who received actual notice. None of them
opted out or objected.
parties have agreed to settle the class's claims for a
total of $149, 205. They propose to distribute this sum in
this fashion: attorney fees and costs of $49, 237 (should the
court approve that amount); settlement administrator costs of
$16, 500; a $5, 000 incentive award for the named plaintiff,
Bryan Bailes; and the remainder, $78, 468, to be divided
equally among the 2, 931 class members “to whom notice
was sent and not returned as undeliverable.” Doc. 28-3
at 5-6, 8. This formula would provide, if approved, each
class member who received notice with about $26.77. If
finally approved, the Proposed Settlement requires the
administrator to mail settlement checks to all class members
“to whom notice was sent and not returned as
undeliverable.” Id. at 8. Any checks not
cashed within 120 days of issuance would pass to Goodwill
Industries International, Inc. as a cy pres beneficiary.
addition to the monetary considerations detailed above, the
parties have agreed not to publicize the settlement.
Plaintiff and all class members also have agreed to release
all claims they may have against the defendant based on
plaintiff's First Amended Complaint.
Joint Motion for Order for Final Approval of Class Action
reviewing parties' submissions, the court concludes that
it cannot currently approve the Proposed Settlement because
the information the parties provide is insufficient to allow
the court to make the findings necessary for approval.
Specifically, the parties' joint motion never asks the
court to issue a final class certification order. And the
parties did not raise or present evidence on this issue
during the April 25, 2017 fairness hearing.
Supreme Court explained in Amchem Products, Inc. v.
Windsor, class certification under Federal Rule of Civil
Procedure 23(a)-(b) must precede settlement approval under
Rule 23(e). 521 U.S. 591, 619-22 (1997); see also
Id. at 622 (“Federal courts, in any case, lack
authority to substitute for Rule 23's certification
criteria a standard never adopted-that if a settlement is
‘fair, ' then certification is proper.”).
Here, the court has not issued a final certification order
certifying the settlement class. It merely has certified the
class conditionally for purposes of sending notice, gathering
objections, and laying a foundation for a fruitful fairness
hearing. It remains, then, for the parties to seek
final class certification.
the parties neither have moved for nor submitted information
about final class certification, the court cannot yet certify
a class action under Rule 23, and so it cannot grant final
approval of the Proposed Settlement. Cf. Gambrell v.
Weber Carpet, Inc., No. 10-2131-KHV, 2012 WL 162403, at
*3 (D. Kan. Jan. 19, 2012) (denying motion to approve FLSA
collective action because the parties did not ask the court
to issue a final class certification order and did not
provide sufficient information for the court to make a final
class certification decision).
court presumes that class counsel will cure this omission and
promptly file a motion seeking final class certification (and
showing why that result comports with the governing law). But
another aspect of the Proposed Settlement presents a more
Rule 23(e), any “settlement, compromise or dismissal of
certified class claims” requires court approval.
Freebird, Inc. v. Merit Energy Co., No. 10-1154-KHV,
2012 WL 6085135, at *4 (D. Kan. Dec. 6, 2012). The court may
approve a settlement only if it finds that the proposed
settlement “is fair, reasonable and adequate” in
all respects. Id; see also Fed. R. Civ. P.
23(e)(2). To determine whether a proposed settlement is fair,
reasonable, and adequate, the court considers four factors:
(1) whether the proposed settlement was fairly and honestly
negotiated; (2) whether serious questions of law and fact
exist, placing the ultimate outcome of the litigation in
doubt; (3) whether the value of an immediate recovery
outweighs the mere possibility of future relief ...